Florida governor inks divestment bill
By Pensions & Investments | June 8, 2007 3:10 pm
Gov. Charles J. Crist Jr. today signed the Florida Sudan and Iran divestment bill into law; it will take effect immediately, said state Sen. Ted Deutch, the bill’s sponsor.
Under the terms of the law, the $170 billion Florida State Board of Administration, Tallahassee, will have to contact companies with business ties in Sudan and with energy ties in Iran asking them to stop the activities; unresponsive companies would have to be divested 90 days after the communication.
Divestment could cost the Florida fund $22 million and from two to 38 basis points in lost performance, affecting 45 companies in which the fund holds as much as $3.5 billion, according to a Senate staff analysis.
Michael P. McCauley, Florida SBA director of investment services and communications, said fund officials won’t be able to determine the effects of the new law’s requirements for several months. “Once the list of companies is developed, it will be released publicly,” he said.
The bill, which passed both the Senate and House unanimously, excludes the $2.6 billion Florida Retirement System defined contribution 401(a) plan, although the fund would have to ask managers of these assets to create Sudan and Iran-free funds and then move assets into those funds if they are created. Mr. Deutch said some municipal funds in the state were considering adopting similar divestment policies.